Added to the case against compulsory cover, a Ministry of Transport report in 2009 suggested it wouldn't bring significant safety benefits.

Conservative estimates are that at least a quarter of a million, or 8.5 per cent, of the country's cars are uninsured. That's 271,670 uninsured vehicles.

Dog and Lemon Guide editor Clive Matthew-Wilson said the Government should pay out for accidents that involve uninsured motorists.

"Where a totally innocent third party is involved, there should be a government fund, administered by the Justice Department, where the fund pays out and then collects off the guilty party.

"Most people are strongly in favour of compulsory third-party insurance to prevent problems like this.

"But the problem is that the drivers most likely to have this sort of accident, where they run into someone, are the ones least likely to have insurance."

The 2009 report said Kiwis who failed to get insurance most commonly said they simply couldn't afford it.

Matthew-Wilson said poor suburbs and rural areas often had many uninsured drivers and a policy shift was needed.

"There's no easy answer to this one. A significant percentage of the population is driving round without a licence."

A further 10 per cent probably had no warrants of fitness, he added. "That's just shocking. But the problem is successive governments have set up the entire transport system around roads. People who don't have access to a car are simply stranded.

"As a result, people who shouldn't be driving are driving.

"The one thing that would change behaviour is to put in a strongly entrenched system of public transport throughout New Zealand."

No cover leaves victim poor

When an uninsured Mercedes driver crashed into Mark Graham's Toyota Yaris, a dazed Graham (picture) had no idea of the headache he'd just gained.

Graham was $7,000 out of pocket over Christmas after the accident six weeks ago in Pitt St. Three side panels and the rear bumper on the Yaris were ruined.

The two drivers exchanged contact details and Graham took photos of both cars. The Mercedes driver apologised, saying he hadn't seen the Toyota then admitted he didn't have insurance.

"I was slightly in shock. Your mind gets a bit scrambled after a collision," says Graham. He had to take his case to the Disputes Tribunal because his insurer said without an "admission" of fault from the other driver, Graham wouldn't be paid.

Graham said many people in his situation were lumped with lengthy court battles, and the judiciary should consider higher minimum repayments. He said paying off costs in token amounts "benefits the person forced to pay rather than the person out of pocket".

After his experience, Graham believes uninsured motorists should forfeit their cars if they can't pay for damage they cause.

"In lieu of a change to insurance laws, it would be beneficial that the other person's assets, maybe their car, was transferable as collateral."

Although many uninsured cars were of low value, the Mercedes clearly wasn't.

"My assumption is that his car value would more than exceed the cost of my claim," Graham said.